Tax Figures
Corporate Income Tax
16.5% for Hong Kong sourced profits from business carried out in Hong Kong.
Income Tax Rate
- HKD 0-40,000: 2%
- HKD 40,001 – 80,000: 7%
- HKD 80,001 – 120,000: 12%
- HKD 120,001 +: 17%
Expats are able to offset their taxable income with relevant business expenses.
Payroll Tax
N/A
Sales Tax
N/A
Withholding Tax
N/A
Time to prepare and Pay Taxes
74 hours
Tax Returns Supplied
Yes
Employers Social Security and statutory contributions
Employer MPF (Mandatory Provident Fund) is 5% of gross income calculated on a max of HKD 30,000 per month.
Employees Social Security and statutory contributions
Employee MPF (Mandatory Provident Fund) is 5% of gross income calculated on a max of HKD 30,000 per month.
Payroll
Employment in Hong Kong is said to be less regulated than it is in many other jurisdictions such as the European Union and the United States, but running a payroll will still require attention to local laws and statutory requirements for both foreign nationals and Hong Kong residents.
The primary concerns for a foreign company that needs to comply with tax laws in Hong Kong are: individual income tax (IIT) for employees, social security costs, pension contributions, payroll tax, sales tax, withholding tax, business tax and permanent establishment concerns.
Remote Payroll
A remote payroll in Hong Kong is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Hong Kong. One option for a non-resident company to payroll its employees (local and foreign) in Hong Kong is to use a fully outsourced service like a GEO, which will employ and payroll the staff on their behalf.
Local Payroll Administration
In some cases, a company will register their business in Hong Kong under one of the forms available, but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Internal Payroll
Larger companies with a commitment to Hong Kong may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Hong Kong payroll, and can fulfill all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Hong Kong employment laws.
Currency
HKD
